The chief executive and chairman of Westpac will step down following a money-laundering scandal, the bank said on Tuesday.

Westpac chairman Lindsay Maxsted said chief executive Brian Hartzer would step down on Monday to be replaced by chief financial officer Peter King until a global search for a replacement is completed.

Mr Maxsted also said he would bring forward his own retirement as chairman to the first half of 2020 in the wake of legal action taken last week by Austrac, Australia’s financial crime-fighting agency.

Ewen Crouch, who chaired the Westpac board’s risk committee, will not stand for re-election at the bank’s annual meeting next month, Australia’s second-biggest bank by market capitalisation said in a statement.

“The board accepts the gravity of the issues raised by Austrac,” said Mr Maxsted. “As was appropriate, we sought feedback from all our stakeholders, including shareholders, and having done so it became clear that board and management changes were in the best interest of the bank.”

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